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CMA Intermediate · Corporate Accounting and Auditing · Audit Report and Reporting under CARO

Zenith Polymers Ltd has not deposited GST of ₹8 lakh because it has contested the demand before the GST Appellate Authority. It has also not deposited ₹3 lakh of customs duty and has only written a letter of representation to the department, with no proceeding pending. Under CARO 2020 clause 3(vii)(b), which treatment is correct?

Report the ₹8 lakh GST as a disputed due along with the forum where the appeal is pending. The ₹3 lakh customs duty is not a dispute, because clause 3(vii)(b) says a mere representation to the department is not treated as a dispute.

  1. AReport both ₹8 lakh and ₹3 lakh as disputed dues with the forum named
  2. BReport ₹8 lakh as disputed with its forum; the ₹3 lakh is not a dispute, as a mere representation is not treated as a disputeCorrect
  3. CReport only the ₹3 lakh, since the ₹8 lakh is already under appeal
  4. DReport neither amount, as dues under dispute are outside CARO

Explanation

Clause 3(vii)(b) requires disclosure of the amount and the forum where the dispute is pending. It states that a mere representation to the department is not a dispute. So the ₹8 lakh is reported with its forum, while the ₹3 lakh is not treated as disputed.

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